Book Mart has two employees in 2013. Jessica earns $4,500 per month and Moses the manager earns $11,000 per month. Neither is paid extra if they work overtime. Assume the Social Security tax rate is 6% on the first $110,000 of earnings and the Medicare tax rate is 1.50% all earnings. The federal income tax withholding is 15% of gross earnings for Jessica and 20% for Moses Both Jessica and Moses have been employeed all year.
Required:
a. Calculate the net pay for both Jessica and Moses for March.
b. Calculate the net pay for both Jessica and Moses for December.
c. Is the net pay the same in March as December for both employees? Why or why not?
d. What amounts will Book Mart report on the 2010 W-2s for each employee?